App.A:4-38. Bonds may be refunded notwithstanding budget provisions or previous appropriation
7. Any bonds or notes authorized by this act to be funded or refunded may be funded or refunded, notwithstanding that provision for their payment shall have been made in any budget theretofore adopted, or that funds or revenues remaining uncollected have by law been appropriated to their payment. The funds to be realized from such appropriations or from the collection of such funds or revenues may, however, by resolution adopted by the governing body prior to the issuance of refunding bonds, be pledged to the payment of such refunding bonds, and such pledge shall thereafter be deemed a contract between such municipality and the holders of said bonds. Such funds or revenues so pledged shall when received be deposited forthwith in a trust fund which shall be established by the governing body of such municipality. Said trust fund shall be deposited in an incorporated bank or trust company and shall be used for no purpose except for the payment of the principal of or interest on refunding bonds issued pursuant to this act, and shall not be invested.
(L.1934, c. 233, s. 7, p. 675.)